The Rabalais Law Firm's La. Estates Blog

Business Incorporation May Be an Integral Part of Your Estate Plan

In about 20% of all estate plans that I prepare, there is also some business planning that needs to take place. This business planning typically takes the form of Louisiana LLC formation. LLC’s, or limited liability companies, are most often formed by clients who hold investment properties or rentals as a way to protect their other assets.

The idea of the LLC is to shield yourself and you personal asset from any lawsuit arising from property owned by you. Lets say you own a rental house and your tenant slips and falls on the property and decides to sue you. Without a Louisiana LLC, the tenant will sue you individually and they can recover from all of your assets you’ve worked so hard to accumulate. When you have an LLC who’s only asset is the rental home, the tenant’s recovery will be limited to the value of the home, and any lawsuit will not threaten all of your other assets.

So as you can see, an LLC can be a very valuable tool when you own investment properties. LLCs allow you to protect assets and that is the primary goal of professional estate planning. If you would like to look into your needs when it comes to Louisiana Estate Planning and whether business planning may also be helpful to you; call me at (504) 274-1980 or email chris@rabalaislaw.com for more information or to set up a no-cost consultation.

Chris Kane, Attorney

Director, New Orleans Office

Specific Bequests Go First In Louisiana

Many times people leave specific items or cash amounts to their heirs when drawing up their will or trust. In Louisiana, our law calls for these inheritances or bequests (as they are technically termed) to be dispensed with before any other bequests. These other bequest could include collections of things or percentages of the entire estate. This law could in some cases lead to undesired results, especially in cases where a person’s estate is not large enough to cover all of their bequests.

For example, Grandma’s will leave a diamond ring to granddaughter Susie and $10,000 to grandson Jay, with the remainder of her estate being left to her sons John and Robert to be divided equally. Grandma intends for John and Robert to inherit the bulk of her estate value under this will, but unexpected circumstances have created a situation where grandma’s estate is only worth about $15,000 at death with $3,000 in the ring and the remaining $12,000 in liquid assets such as cash and stock. Under this scenario, Susie will take the $3,000 ring first, Jay will take his $10,000 cash bequest next and the remaining $2,000 is split between her sons. This result was clearly not what grandma intended, but she wrote this will when she had much more in the way of assets and believed her sons would receive an amount greater than or equal to the amount inherited by her grandchildren.

To avoid this result, grandma could have used conditional bequests when drafting her will to ensure that her sons would receive the bulk of the estate. To ensure that your Louisiana will doesn’t contain costly errors such as this it is always a good idea to consult a professional when it comes to creating your estate plan. I practice exclusively in the area of estate planing for residents in New Orleans, Metairie, Mandeville, Covington, and individuals from throughout Louisiana. To speak with me regarding your estate plan, feel free to call me at (504) 274-1980 or email me at chris@rabalaislaw.com.

Chris Kane, Attorney

Director, New Orleans Office

Your Powers of Attorney: The Most Important Estate Planning Documents During Your Lifetime

Most Louisiana residents think that their last will and testament is the most necessary of all the estate planning legal documents that a person can have in place, however the terms of your will are essentially without effect until after you are already dead and gone. Your Louisiana Will is primarily geared toward distributing your assets and caring for your heirs as opposed to protecting those assets and caring for yourself. Protecting your assets and looking after your own well-being should be your primary considerations while you are still alive.

For the above reasons, your Louisiana Powers of Attorney are the most important and pressing estate planning documents you need to prepare regardless of your circumstances or station in life. A power of attorney is the document that allows another to act on your behalf and make decisions for you when you are unable to make decisions for yourself. There are two different types of Power of Attorney; one is used to protect your property and other financial assets in the event of your incapacity, the other is meant to look after your medical well-being in the event of your incapacity.

Louisiana powers of attorney are so important during your lifetime because of the potential for the unexpected. Anything can happen in life and you want to make sure that you have designated someone to look after your affairs should any misfortune befall you that leaves you incapacitated. Whether it be an accident, sudden illness, or other circumstance that leaves you unable to make decisions for yourself, It is vital that you appoint an agent to act for you. This way you can ensure that your bills are paid, your money may be accessed to pay for unexpected expenses, property can be bought or sold in your name to facilitate your care or financial well-being, and important medical decisions can be made regarding your course of treatment. Regardless of your age, a power of attorney is a necessary legal document for any person in Louisiana. Without it your life can be left in legal limbo should you ever become  incapacitated.

If you have any questions about powers of attorney or Louisiana estate planning in general, feel free to call or email me at (504) 274-1980 or chris@rabalaislaw.com. I primarily serve in New Orleans, Metairie, the Northshore and other surrounding areas in Southeast Louisiana.

 

Chris Kane, Attorney

Director, New Orleans Office

Webinar Review Part 1: How To Decide Between A Louisiana Last Will and a Living Trust For Your Family

I'd like to thank everyone who attended yesterday's Webinar, "How to Decide Between a Louisiana Last Will and a Living Trust For Your Family". This great live event was designed to give your an opportunity to evaluate your family circumstances and choose which Estate Planning alternative best suits your needs and desires. For those who were unable to attend, I'd now like to offer a review of the topics discussed so you can get the gain the same great information received by yesterday's webinar attendees.

1. Your Two Estate Planning Alternatives

• A Professional Estate Plan is a must for anyone who wants to control the distribution of their assets after their passing. Without an estate plan this distribution is left up to our Louisiana Intestacy Laws which are not always in line with your individual wishes.
• Will based planning is the first and most common Estate Planning alternative. It is quick and easy, but your estate must go through probate when you die leaving a will and certain probate assets in your name.
• Trust Based Estate Planning is the second alternative. In this scenario a living trust will govern the distribution of most of your property with the added benefit of avoiding Louisiana probate which will be discussed in greater detail as we move along.

2. How Wills and Louisiana Living Trusts are Similar

• You can accomplish a number of common estate planning goals using either a will or a trust.

With both you can:

• Distribute your estate among many different classes heirs in the exact proportions you desire. Without a plan, only the highest ranking class of your heirs under Louisiana law will share in your estate to the exclusion of all others.
• Delay the inheritance left to your children, grandchildren, and other heirs so that they do not mismanage a large inheritance received at a young age.
• Keep assets in your family in the event of your spouse’s remarriage.
• Plan for Estate Tax Avoidance.
• Ensure a Step-up in basis on your property at death for purposes of capital gains tax planning.

3. The Simplicity of Will Based Planning

• Wills can be completed and put in place quickly. Once you have made all the important planning decisions regarding your estate, you can have a will in place in less than a day.
• No court filings are required
• No transfers or alterations of property titles are required.
• It is easy to revoke your will.

That does it for Part 1 of our webinar review. Tomorrow I will cover the burdens of probate and how living trusts work to avoid probate as well as factors to consider when deciding between a will and living trust.

If you have any questions or would like to meet with me to discuss you Estate Planning options call me at (504) 274-1980 or send me an email to chris@rabalaislaw.com.

 

Chris Kane, Attorney

Director, New Orleans Office

What is A Pour-Over Will?

In the past few months our firm has been preparing an abundance of Revocable Living Trusts for Louisiana residents seeking to avoid probate or succession as it is called in Louisiana. One of the essential parts of a Louisiana Revocable Living trusts is what's known as a pour-over will. Often clients are confused by this term, because their thinking is; "If I have a revocable living trust I shouldn't need a will".

Well I'm here to explain exactly what the pour-over will is used for. When you have a revocable living trust, your Louisiana pour-over will is a essentially the back-up plan for property that is not a part of your trust when you die.

First, The pour-over will governs the distribution of your assets that will not need to pass through a Louisiana succession or probate procedure. These assets include your vehicles and personal effects. The pour over will is in place to dictate what will happen to such assets.

The other assets that the pour-over will covers are assets which should have been placed in your living trust, but for some reason or another, have not made it into the trust. The pour over will is there just in case there are some assets that still need to go thorough probate. The pour -over will typically leaves these assets to your living trust to be distributed according to the terms of the trust. However, the hope, in setting up a Louisiana revocable living trust, is that your estate will never need to pass through a Louisiana Succession.

If you are interested in setting up a revocable living trust in New Orleans, Mandeville, Slidell, Covington, Metairie, Kenner, or elsewhere throughout Louisiana give me a call at (504) 722-3344 or send an email to chrris@rabalaislaw.com.

 

Chris Kane, Attorney

Director, New Orleans Office

Free Webinar: “How To Decide Between a Louisiana Last Will or Living Trust for Your Family”

Hi Everyone, I'd like to Take this opportunity to announce my upcoming free webinar, "How To Decide Between a Louisiana Last Will or Living Trust for Your Family". This informative event is scheduled for Wednesday, March 16 at 2:30. The webinar should last for 30 minutes with a 15 minute question and answer session following the the presentation.

This webinar is ideal for Louisiana Residents interested in learning the differences between using a Last Will for Estate Planning and using a a Revocable Living Trust to accomplish your Estate Planning goals. This webinar will go in depth about the reasons for and against each estate planning method so you can decide which is right for your family.

 

You can register for this webinar at https://www1.gotomeeting.com/register/611293008

As always, If you are  in the New Orleans / Metairie Metro Area or Mandeville / Covington and  are interested in discussing your estate planning options with me one-on-one; feel free to call me at (504) 274-1980 or email me at chris@rabalaislaw.com.

 

Chris Kane, Attorney

Director, New Orleans Office

Webinar Review Part 2: What Louisiana Lawyers Won't Tell You About Avoiding Probate Using Revocable Living Trusts

Yesterday you learned more about revocable living trusts and how they allow you to avoid probate. Today I'd like to continue the review of our recent webinar "What Louisiana Lawyers Won't Tell You About Avoiding Probate Using Revocable Living Trusts" This information could help you and your family avoid many headaches in the future by creating a properly executed trust.

Your Property In Trust

• Not all of your assets need to be placed in trust, only certain assets in your name are considered probate assets and only those assets are must go through a probate procedure to be fully transferred to your heirs.
• Probate assets include:
  • Your Home
  • Other Real Estate Holdings, whether located in Louisiana or another state
  • Stocks and Investments
  • Certificates of Deposit
• Non-Probate Assets include:
  • Personal Effects - your family will handle distribution of these assets internally.
  • Vehicles and Boats  - State law provides for transfer of these assets at Office of Motor Vehicles or Department of Wildlife and Fisheries.
  • 401Ks, IRA’s  - These pass by beneficiary designation.
  • Life Insurance Policies - These pass by beneficiary designation.
  • Bank Accounts - Can stay out of your trust as long as you grant a child or other trusted friend or relative as a signatory on your accounts.

Why Louisiana Lawyers Ignore Trusts

• žMany are unfamiliar with Trusts
  • While trusts have caught on along the West Coast and in the Northeast. Our local culture has not yet accepted the transition from using wills to using trusts for basic estate planning
  • There seem to be adherence to traditional methods of probating wills
• Common Misconceptions about Revocable Living Trusts
  • –Revocable Trusts are not taxed as a separate entity, the assets in revocable trusts are veiwed as your assets for tax purposes. No separate tax return needs to be filed for the trust.
  • You will not lose your  homestead exemption by placing your home into trust
  • –You retain control over your assets in trust and can remove assets in trust at any time 
• žLawyers can make more money from probate fees
  • The cost to set up a trust is often far less than the cost of probate
  • Many lawyers charge a percentage of the estate value, so probate fees on large estates can be exorbitant
  • Multiple probates for married couples and out of state property means more fee.

Is a Trust Right For You?ž

• A trust will replace your will and will revoke all of your prior wills.
• If you are young and still acquiring assets, a trust is probably not right for you. Wait until you have acquired the majority of your assets before setting up a trust.
• žTransfer of assets into trust can be complicated. 
• žThe ultimate question: Do you want to do a little work now to save your family money and time after your death?

I hope you have found this review to be valuable. If you would like to discuss your estate and how a revocable living trust could benefit you, give me a call in the New Orleans/Metairie/Northshore Area at (504) 247-1980 or send an email to chris@rabalaislaw.com. In Baton Rouge, contact Paul Rabalais at 225-329-2450 or paul@rabalaislaw.com.

Chris Kane, Attorney

Director, New Orleans Office

Webinar Review Part 1: What Louisiana Lawyers Won't Tell You About Avoiding Probate Using Revocable Living Trusts

I'd like to thank all who attended our webinar, "What Louisiana Lawyers Won't Tell You About Avoiding Probate Using Revocable Living Trusts". The webinar provided a great opportunity to familiarize yourself with Revocable Living Trusts and the common misconceptions abound among the Louisiana Legal community. For those of you who were unable to make it I'd like to lay out the topics discussed to give you a review of the information provided in the webinar. Today, I will cover the first 3 topics discussed during the webinar and tomorrow's blog post will cover the remaining topics discussed in the webinar.

What is a Revocable Living Trust?

• žBy creating a trust, you create a legal entity to hold your property. Think of a Trust as a box which holds certain pieces of your property.
• žTrusts are a way for you to get your assets out of your name.
• Revocable trusts are different from irrevocable trusts in that you retain your control over the assets you place into trust.
• žWith Revocable Trusts you can
  • Avoid costly probate procedures; when certain assets are no longer in your name those assets do not need to go through probate.
  • Retain control over your property, meaning you can sell assets in trust, remove assets from trust or purchase new assets in the name of the trust.
  • Create a fund of assets that will benefit your family for generations.

Why Do You Want to Avoid Probate?

• What is Probate?
  • Probate is a court proceeding, in Louisiana we call this court proceeding a Succession
  • Probates or Succession place your heirs in possession of your estate after death.
  • Without probate your heirs cannot take action to sell items in your estate or access other assets left in your estate.
• Probate is Time Consuming
  • The average probate procedure in Louisiana takes about 3 months, but it could be much longer if any complications arise.
• Probate is Costly
  • žYou can expect to spend at least $5,000 per probate procedure. Costs can increase greatly if there are any challenges to the probate or other complications.
• Multiple Probates
  • When you own real estate in multiple states, probate must be completed in each state where you hold property in order for your heirs to access all of your property after you pass.
  • Each probate procedure comes with its own costs and delays.
• Probate for each spouse
  • With married couples owning property jointly, there is a need to probate each spouse's portion of co-owned property.
  • Each probate procedure comes with its own costs and delays.
• žProbate is Public Record; anyone can access all the court filings associated with the probate of your estate
  • Included in these filings is your will, and a detailed list of all the property left in your estate and the approximate value of that property.
  • This information could be used by unscrupulous creditors and salesmen to harass your heirs after you pass
  • This is especially alarming this day in age where almost all public records can be accessed on the internet.

How Trusts Avoid Probate?

• žWhen assets are not in your name, probate is not needed because probate is used to determine ownership of assets titled in you name. Your trust will name beneficiaries who will share in the trust assets after your passing.
• žControl over your estate in trust transfers automatically to your successor trustee, a person you appoint to oversee the distribution of trust assets in lieu of a the state courts.
• žYour estate in Trust is distributed according to the terms of your trust as opposed to the terms of a will.
• žYour family saves time, cost, and headaches.

Tomorrow I will be writing part two of this webinar review covering which of your assets need to be placed into trust, what Louisiana lawyers are not telling you about trusts, and whether a trust is right for you.

If you would like to discuss your estate and how a revocable living trust could benefit your family, give me a call in the New Orleans/Metairie/Northshore Area at (504) 247-1980 or send an email to chris@rabalaislaw.com. In Baton Rouge, contact Paul Rabalais at 225-329-2450 or paul@rabalaislaw.com.

Chris Kane, Attorney

Director, New Orleans Office

Your New Years Resolution: Plan Your Estate

Its the first week of 2011 and almost everyone you talk to is discussing how they are going to turn a new leaf in some area of their life. Some, including myself, will start working out and eating right; some will start saving for their retirement; some will give up a vice like smoking. Whatever it may be, people are ready for a fresh start and a positive outlook for the future.

One aspect of creating a successful future is planning your estate by putting together wills, powers of attorney, and living wills to ensure that your assets and family members are protected in case anything should happen to you. And unlike all of the new years goals I listed earlier, proper estate planning doesn't involve will power or any ongoing commitment. Effective estate planning can be accomplished in a matter of hours and will provide you a lifetime of comfort.

If you are interested in setting up an Estate Plan as part of your New Year' s resolution, feel free to call me in the New Orleans/Metairie Area at (504) 247-1980 or send an email to chris@rabalaislaw.com. On the Northshore, contact Brent Durham at (985) 246-3020 or brent@rabalaislaw.com. In Baton Rouge, contact Paul Rabalais at 225-329-2450 or paul@rabalaislaw.com.

 

Chris Kane, Attorney

Director, New Orleans Office

The Importance of Special Needs Trusts

Special Needs Trusts are a great tool for protecting your disabled relatives and ensuring their eligibility for valuable Federal Medicaid programs. This article is designed to inform you as to how these trust are created and administered, and most importantly, to inform you of the benefits these Special Needs trusts.

Individuals with certain disabilities can receive federal benefits including money for their support and medical expenses from various Medicaid programs. Medicaid is a system set up by the US government specifically designed to assist low income individuals (this is not to be confused with Medicare, federal health insurance for the elderly). In order to qualify for the various Medicaid programs, individuals must have an income level and resources below certain eligibility thresholds.

For the disabled, problems with Medicaid eligibility often arise  when parents or other relatives leave an inheritance to their disabled children. The assets inherited by the child very well may preclude them from continued receipt of federal aid. Fortunately, the law allows for these assets to be placed into a trust for the disabled child while still preserving their eligibility for federal benefits. However certain terms and restrictions must be included in the trust to ensure that eligibility parameters are met.

Essentially these trusts allow for the assets in trust to be used only for certain needs of the disabled child. The assets in trust will go toward supplementing government benefits rather than supplanting them. The most common restrictions on the special needs trust include provisions which prevent trust assets from being used for food and shelter of the disabled individual. The goal is to let the federal government continue to pay for these primary expenses.

If you or a relative is disabled and would like to discuss your options for using a special needs trust feel free to call me in the New Orleans/Metairie Area at (504) 247-1980 or send an email to chris@rabalaislaw.com. On the Northshore, contact Brent Durham at (985) 246-3020 or brent@rabalaislaw.com. In Baton Rouge, contact Paul Rabalais at 225-329-2450 or paul@rabalaislaw.com.

 

Chris Kane, Attorney

Director, New Orleans Office